(Victorville)— Today, the Southern California Logistics Airport Authority (SCLAA) issued a formal notice to bondholders of its Tax Allocation Bonds of an anticipated shortfall in redevelopment tax increment available to fully satisfy its upcoming bond payments due. On December 1, 2012, $12,816,117 is due from SCLAA and $9,916,551 is available in tax increment on hand to pay against the total obligation. The difference will be satisfied from the bond reserves held by the Trustee in amounts determined by the Trustee pursuant to terms of each bond Indenture. It is expected that an impending default will only affect the 2007 and 2008A subordinate series of non-housing bonds issued by the SCLAA. The housing bonds issued by SCLAA will not be affected by the default.
“The default has been anticipated by SCLAA largely due to legislative maneuvers by the State of California to shift redevelopment funds and eliminate redevelopment agencies to satisfy the State’s budgetary shortfalls,” says Chairman Ryan McEachron. “What is most important for our local public to know is that this default does not impact the service level at the Southern California Logistics Airport and it does not affect the services provided by the City of Victorville to its local residents,” says McEachron. Security for the SCLAA bonds is tax increment generated from what was recognized as the Victor Valley Economic Development Authority (VVEDA) redevelopment project area. VVEDA is currently litigating the applicability of the State of California’s redevelopment agency dissolution as VVEDA believes the redevelopment dissolution laws were written in such a way as to not apply to VVEDA.
The impending December 1, 2012 default will be the second default triggered by the State of California’s redevelopment agency elimination. SCLAA last defaulted on its 2007 and 2008A Non-Housing Tax Allocation Bond principal payments on December 1, 2011. SCLAA cured its December 2011 principal defaults on March 16th, 2012 and avoided further default on its June 1, 2012 debt service obligation. SCLAA’s next scheduled debt service obligation is June 1, 2013.
More information, including background information can be found at: http://www.victorvillecity.com/investor-relations/